Pressure is mounting on the aged care sector and federal government to reveal how some $13bn in taxpayer funding, along with millions in new funding for Covid-19, is being spent to benefit residents.
Guardian Australia analysis of the 10 aged care homes worst affected by coronavirus in Victoria shows that three are controlled by two large companies, which between them received more than $1.45bn in government funding over the past two years and paid out dividends to their shareholders totalling $77m.
But while some in the industry have been reaping big profits, aged care homes are not required to tell residents and their families how many staff they employ and the skill-sets of those staff, including whether they are registered nurses. Nor are they required to disclose how much of the subsidy provided for each resident by the government is spent on care, food, and other services, or how much taxpayer money goes unspent or used on non-care related activities such as investments.
Aged care deaths linked to Covid-19 in Australia have reached 460, with the federal government so far refusing to disclose which homes are responsible for the most deaths, or to detail how hundreds of millions of dollars given to aged care homes to retain and up-skill staff have been used by the sector.
Another 50 Victorian aged care deaths were added on Friday, as a backlog of deaths in the system that were originally put down to other causes were reclassified as related to Covid-19. Guardian Australia analysis shows that there have been at least 118 deaths among the 10 worst-hit homes in Victoria, where a total of more than 1,450 cases have been recorded.
Every one of the top 10 is in the private sector, run by either a for-profit company or a charity.
In Victoria, state-run homes make up 22% of aged care facilities and look after about 10% of senior citizens in the system, a government spokeswoman said. Yet, of the 1,121 active cases of coronavirus linked to aged care as of Friday, just four were in the public system.
Lack of transparency
Principal analyst for the Centre for International Corporate Tax Accountability & Research, Jason Ward, said: “We know what goes into aged care, but we can’t find out how it’s spent.
“There’s no requirement for transparency whatsoever,” Ward said. “I’ve looked, I’ve done three reports on this … looking at for profits and not-for-profits, and in all cases there is a complete lack of transparency. There is also a provision in Australian accounting standards that says if you don’t have shareholders you are allowed a lower level of reporting.”
On top of the $13bn in federal funding allocated to the sector each year, a further $4.3bn is spent by residents and their families. A further $1bn was committed by the federal government for Covid-19.
Ward’s analysis found that the nine largest non-profits in the sector received an average of $66,516 in federal funding per residential place in the 2018-19 financial year. The per place funding ranged from $72,218 to $55,633.
“If you take the average and add in an estimate for resident fees of $22,172, you get a total of $88,688 per aged care resident,” Ward said. “That should be funding some pretty good quality, well-staffed care.”
Reports filed with the stock exchange by some of the sector’s biggest operators show that some people have done well out of the business of aged care. Among for-profit companies, aged care giant Estia, which operates two of the worst-hit homes in Victoria, has received more than $860m in government support over the past two years.
Over the same period it has paid dividends totalling $55m – of which almost $5m flowed to companies associated with Perth billionaire Kerry Stokes, who is a major shareholder in the company.
The company refused to disclose how many residents have died of Covid-19 at its Victorian homes.
A spokeswoman said that this year it spent $506m on staff costs and supplies including medicine and food, which was more than it received in taxpayer funds.
Smaller rival Japara received more than $590m in government funding over the same period, during which it paid investors dividends of $21.7m. Its former chief executive, Andrew Sudholz, received $1.3m.
Japara’s Goonawarra facility, in Sunbury, was the ninth-hardest hit by coronavirus in Victoria, with 112 infections. Coronavirus killed 16 people at the facility, a company spokeswoman said, adding that costs exceeded government funding and no taxpayer funds flowed into dividends.
No disclosure of how federal money is spent
The Australian Nursing and Midwifery Federation’s (ANMF) federal secretary, Annie Butler, said there were “far too many examples of additional money going into the system and employers still telling us they have to cut staff or they can’t afford pay rises,” she told Guardian Australia.
“We have been calling for transparency for years,” Butler said. “Back in 2016, we surveyed our members and we heard stories about, for example, a new chandelier appearing in the hallway of an aged care home, or another shiny new painting, but they were being told they were not allowed to use more incontinence pads on the patients.
“These are genuine stories. Then we have found the federal government solution is to throw more money at the sector without any ties or guarantees about how they will spend the money.”
The federal aged care minister, Richard Colbeck, is yet to respond to questions from Guardian Australia about whether he has placed any requirements on the sector to show how Covid-19 money is being spent, and whether he believes homes should be more transparent generally.
In December, the federal government, with the support of One Nation, blocked an amendment to aged care legislation introduced by crossbench Senator Stirling Grif, which was seeking transparency and accountability for the billions of dollars in taxpayer-funding received by the sector.
Butler said it was “astonishing” this information was not already required to be disclosed to the public.
“Seventy per cent of the entire sector is taxpayer-funded and we can’t track where the money is going,” she said. “They will disclose general stuff such as the amount spent on like ‘labour costs’ but we want to dig into that; who does that cover? Is that the executives on millions of dollars, or the care worker on $37,000 dollars?”
Dr Sarah Russell, a public health and aged care researcher, said the lack of transparency around finances had made it “incredibly hard for families to know the basics” when choosing a home for a family member.
“If you choose a home for a father who has dementia you want to know how they spend the government subsidy money; is it on staff? On food? Activities? What are they spending it on? But there is no way of knowing,” she said.
“When people ask me how to choose an aged care home I tell them to ask the home how they spend the government subsidy. There are homes that have responded ‘We can’t tell you, that’s commercial in confidence’. I phoned the health department to find out which aged care homes had deaths and the number of deaths. I was told they had this information but it was ‘top secret’. How are families supposed to make decisions?”
Where is Covid-19 funding going?
On Monday, Colbeck announced a further $563m to extend support for the aged care sector’s response to Covid-19. For the first time, homes will have to report how these funds were used for additional Covid-19 related costs, through requirements in providers’ end-of-financial-year returns.
Butler said she does not support more money for the sector until the ANMF understands where existing federal funding – including $101m to up-skill aged care workers in Covid-19 infection control and $235m to retain workers – is going . It was concerning the sector did not have to prove to the federal government how Covid-19 funding announced prior to Monday had been spent, she added.
Of all the Covid-19 funding announcements for the sector, none were specifically for employing more nurses, and that was a matter of deep concern, she added.
“The percentage of nurses in the sector has declined over 15 years. We say for quality care there should be 30% of staff who are nurses and yet it’s currently about 14%,” she said.
“And yet people are paying significant amounts of money and not getting these staff and care. Will almost 500 premature deaths in less than six months of elderly residents be enough for the government to take action?”
Ward agrees the lack of Covid-19 funding transparency is a worry, but said more transparency was also needed from the homes themselves.
Of the operators behind the 10 hardest-hit homes in Victoria, two, Heritage Care and Primary Caring, which runs the Cumberland Manor home in Sunshine North, have no publicly available accounts.
“Even the companies that do file financial statements, like the large non-profits, use exemptions so they don’t have to file the full data set,” Ward said.
“They don’t have to tell you how they spent the money, and these are mostly church-based entities.
“Blue Care, owned by the Uniting Church in Queensland, got $600m in federal aged care funding but did not show where the money went in their report, even though aged care is the biggest component of their business. Yet they are not required to report on it separately.”
Blue Care also sent a video message from the CEO to all staff, urging them to sign up to JobKeeper.